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Jan 13, 2012

Mukesh Ambani's Reliance Industries plans to offer high speed data services on attractively priced tablets by 2012-end, which will coincide with the worldwide deployment of an advanced technology that it plans to use, two people familiar with the development told ET.

The company had earlier planned to launch services by mid next year on data cards that could be plugged into computers and laptops. The RIL services is based on fourth generation, or 4G, technology which offers faster internet access compared to third generation (3G) services. RIL plans to launch tablets at around Rs 3,500 and bundle it with data offering as low as 1 GB at Rs 10, a tenth of the current 3G prices.

RIL's entry and price disruption could therefore nullify the business case for 3G for existing mobile operators, all of whom on an average offer 1 GB of downloads for Rs 100 at present. Analysts also add that the immediate threat posed by RIL's entry will be to operators like Sistema Shyam and Tata Teleservices, the largest players in the dongle business, plug-in devices that provide wireless connectivity to the internet.

An industry expert who asked not to be named said: "Frankly I am quite surprised that none of these companies is treating RIL's launch as a threat at the moment. I would think it is time to start gearing up for it. I don't see any of them doing anything." RIL is the only company to have pan-India spectrum to offer wireless broadband services on the 4G technology platform having paid Rs 13,000 crore for these airwaves.
It will be launching services based on Qualcomm's long term evolution, or LTE, technology, which is currently in test phase. Global majors like Vodafone, Verizon and Telenor have deployed LTE networks in some developed markets. While subsidising devices will be main pillar of RIL's upcoming 4G mobile services offerings, the company is also analysing lessons from its previous foray into mobility. India's largest private sector company had launched mobile services in 2003, before the group was split between brothers Mukesh and Anil Ambani. At the time, it offered mobile handsets at an initial payment of Rs 501.

In 2006, after Anil Ambani took charge of the telecom unit of the divided Reliance group, the operator struggled with unpaid bills and wrote of nearly Rs 4,500 crore primarily on account of the discount scheme.

The RIL management is still working on structures that will avoid defaults of a similar nature, said one person.

The company said its broadband offerings were still in the planning phase and no dates had been finalised.
"Infotel Broadband Services is currently in the process of actively evaluating various technologies that will form a part of its pan-India rollout. At this stage, we have neither finalised a date for launching the services, nor the various types of services and associated tariff plans that we would offer at launch," the company spokesman said in an e-mail statement. "It is our intention to make all of our offerings device agnostic, and our services will be supported by a wide variety of devices from multiple vendors.

We will, at appropriate times, make announcements about our plans," Reliance Industries spokesperson said. Currently the cheapest tablets in the market are between Rs 12,000 and Rs 13,000, including one of Reliance Communications at Rs 12,999, which it plans to bring down by 50% by late next year as volumes increase. Tablets and smartphones spur increases in data consumption and these services are billed at a premium giving some relief to operators hit by falling profit margins due to hyper competition in the voice calling space.